BRIAN: Today is Thursday, June 2, 2011 and we are here at The Cable Center in Denver, Colorado with Richard Gessner, founder and chairman of Massillon Cable Television and Robert Gessner, president of Massillon cable TV. I wanted to start with the first question to you Richard. How did you become interested in cable television?

RICHARD: Well, I worked my up to broadcast sales manager for a television station in Utica, New York. I was general manager also of the radio station in the same market. It was a single station market, which means that I got all the business to sell advertising.

ROBERT: Single station market.

RICHARD: Oh, single station market. I looked around and I said “Boy, if somebody ever built a cable company here, they’re going to steal my audience. So, if anybody’s going to build one, let it be us.” So I went to the owner and he said, “Yes. Sounds good to me.” I said I also want to get 10% of each franchise as I get them. Which is what I did and I think that was probably one of the best things I did.

BRIAN: In about what year was that?

RICHARD: That would be around 1962, something like that.

BRIAN: Bob, how long have you been involved in the industry and were you always interested in getting involved in the family business?

ROBERT: Well, my official start date with Massillon Cable TV was in 1979. So, I was 32, 33. I have to say I was probably still in high school when I told my father I’d like to come back. I’d like to work in the family business. At the time, there really wasn’t anything for me to do. I did some warehouse kind of work. It was really high school days. Off to college and a couple of years after college, I was working for a large insurance company and had literally just moved to Detroit, called my father to say that my wife and I had just purchased our first house. And I can really remember clearly, he said “How soon can you sell it? Because it’s time to come home and work in the company now.” So, within a couple of months, sold the house and came back at home. Been there ever since.

BRIAN: Great. These questions here, I’d like to throw out to both of you. Were there any memorable people that you worked with in the early days of the business?

RICHARD: I’ll defer to you.

ROBERT: I really can’t say. I don’t know.

BRIAN: Well, you mentioned earlier that you had visits from Bill Daniels.

RICHARD: Bill Daniels had a jet plane. And he would to Denver from New York City ever once in a while. The price of gasoline for a jet airplane was a lot more in New York City than it was in my market. So he would stop off and see me and have his jet filled with the cheaper fuel and we’d go out and have lunch together. So we were good friends. I used to go to his house all the time. So Bill Daniels was a great guy.

ROBERT: You know, I have to say there are so many memorable and colorful characters in the cable industry, that it’s hard to say which are memorable but as I think about it, I think most of my memorable characters are probably memorable to me because I was in scraps with them rather than as co-workers or buddies. We had some run-ins with TCI so I shouldn’t even say who they were. That we were sort of in Dutch with and had some really royal battles with and the same thing with some of the programming networks. I know Chuck Bratches? and George Bodenheimer at ESPN, we had some monumental struggles there. We’ve had our fights with Fox and so forth. I like to think that we have respect for one another but I’d say they are my memorable characters but they are in my memory because we had tough times not good times together.

But that’s probably indicative of the cable industry as it’s changed.

BRIAN: I’ve seen some of those articles, that you were quoted as it was all about the affiliate fees. Subscriber fees and such.

ROBERT: That’s correct.

BRIAN: Since we talked earlier when we had our tour about the Barco’s. Can you talk about your relationship since we’re the Barco Library here at the Cable Center? Just talk about your connections with Yolanda Barco.

ROBERT: I met Yolanda a couple of times because of their system in Meadville is only 50-60 miles from ours. It is interesting of course that they were Pennsylvania so they really weren’t in our Ohio Association nor were we in Pennsylvania. I do remember her as being a highly respected and very intelligent woman. Very tough and even into the 70s and 80s, it was still a man’s world in the cable industry. You didn’t see a lot of women in system roles at that time or at the higher ranks of the programmer roles. So she was a very well respected lady.

BRIAN: What have been some of the challenges of running a smaller cable company? I realize that Massillon is not really that small, it’s got 45,000 subscribers.

RICHARD: Getting enough money to do it. I can remember ordering a tower but I didn’t have any money at all. I ordered it, sold stock and got to build that tower. I felt relieved. Although I’m not so sure as I think back because the payroll is always more than the bank deposit. We kept going anyway. I can remember, this might not be an answer to your question but it is something that comes to mind. When a customer came in... when we hooked somebody up, it would be $7.50 for the installation plus the first month’s rent which was $3.95. I can remember we worked the first month and we got about 20 customers and one of them came in and paid for the second month. Oh, thank goodness this thing is going to work.

ROBERT: It is kind of interesting thinking back but as we’ve been talking about the history of the company in the last couple of days, some of the challenges have remained unchanged. One of the most difficult times in the company’s history before I was even really aware of; it was the complete failure of the electronics. We were trying to be first, I can’t say we because I wasn’t involved, the company was trying to be the first transistorized system in the mid-1960s. It completely crapped out in the first freezing weather. All the equipment taken out and replaced with tube type of amplifiers that worked for many, many years. That same sort of thing still kind of plagues a smaller cable operator in that we have to rely on our suppliers. We have rely on their word rely that what they’re selling us is going to work because we’re not large enough to have a research and development center. We’re not large enough to have consulting engineers and really do these deep dives into the technology. So instead you take something of a leap of faith, run some equipment and if it doesn’t work, you find a way to make it work. We had the same thing happen; in 2008 we were one of the first systems to become all digital, no analog. We were the first company to roll out a specifically made ETA box and it had some of those same growing pains. So that sort of thing doesn’t change. You roll things out and you find ways to make them work.

One of the challenges when you do that in a small system is you don’t have a test bed, so you take somebody like Time Warner Cable when they launched their full service network in Orlando, it was 4,000 out of maybe 10 million customers. Very small number. When we roll the dice on our new technology or on our new marketing program or anything new, we have to take that gamble with 100% of our customers. So it’s a little bit more difficult, leap of faith. But at the same time, I think there are some blessings to being a smaller system and one of those is we’re flying below the radar most of the time and what happens in Washington, and the FCC doesn’t really affect us quite as much. I don’t know if that is because we are too small to care or if we are so local, we’re so focused on doing what’s right for our customers that we don’t run into those same problems. Perception problem.

BRIAN: So you think that’s to your advantage?

RICHARD: Sure, yes, a blessing and a curse, to be in a medium sized system. One of the good things, we have a 128 employees the last time we counted and we had 56 trucks on the road and a group of employees that are just second to none. We have a dispatcher, all of our trucks have computers and are dispatched as needed, regardless of where they by keyboard.

ROBERT: That’s one of the interesting [things]. You keep referring to us as a small system and I guess we are. I would say we’re tweeners. We’re the largest of the small and the smallest of the large. And that does give us, I think, something of a unique advantage over larger and smaller systems. We’re large enough that we can afford to have, like now, a terrific crop of network engineers who really like a challenge and like being innovative and creative, but we’re small enough that we can focus on where we want. So not a lot of hierarchy or bureaucracy. Never had a budget for anything in the whole company. We just say “Got the money? Yup. Good idea. Let’s do it.” In fact, I think this is one of the best stories about our employees. I was out at CableLabs summer conference a couple of summers ago and was talking about some new proactive maintenance tools that we developed to reduce inbound service calls to our call center and outbound truck rolls. After I discussed that for a while for a group, somebody from CableLabs came to me and said “Come with me, I want to show you something.” Took me into the exhibit hall and here was a Comcast technician who took me through a proactive maintenance tool beta demonstration and I was kind of laughing the whole time because it was our system. We had exactly the same stuff and when he was all finished, I said “That’s really good.” I said “Where is this in use?” He said “It’s Beta.” I said “Six months we’ve been working it in our system. You’ll really like this.” It had been made entirely in-house by our own guys and we knew it worked. We didn’t have to rely on anyone else to help us with it. So those are the challenges there for a small operator. Basically to gain the respect from your larger contemporaries. I think that’s a difficulty. It’s certainly difficult in terms of prices, contract negotiations and that sort of thing, but the ability to really focus our resources on the consumer at the end. Not having to worry about the ivory tower in a distant town somewhere is a great benefit to us. So there’s a balance there.

RICHARD: I think for a smaller system operator, keeping your employees happy is extremely necessary. In fact we pay for our employees’ kids’ college after they’ve been with us for five years. All they do is submit to us a successfully completed semester or quarter and we give them 80% of whatever that is. The only reason we do only 80% is, we don’t want somebody to go in and say I want 100% and I’m going to some Harvard.

ROBERT: They need some skin in the game to keep them serious about [it].

BRIAN: That’s amazing. So let’s continue in that vein. The company seems very active in the community as well and on the tour we talked a little bit about local origination and things like that. Elaborate on that just a little bit.

ROBERT: It’s probably one of our… I’ll toss it back to you in a second… we have, I think, the capstone of one of our projects in our Massillon system. It is a full blown digital television studio in our local high school that is operated and staffed by students. It’s a vocational course. They produce 100s of hours of programming every year. It’s very professionally done. They have their own full time channel on the system. They sell advertising. They create the ads. They’re the on camera talent as well as behind the scenes. So they really are getting a full blown education in new media or television media and it started in 1967, 1968 with my father trying to overcome a franchising obstacle that had been put in the way during the initial franchise efforts. Tell about that.

RICHARD: They said that a cable company couldn’t originate programming. I said “What do you mean that I can’t?” Said “I can’t? Here’s what I’ll do then, I’ll have the kids originate the programming and I’ll help them.” Which is what we did. I went to the Timkin? Company and I got a grant to buy equipment, cameras, the works. Built a studio in the school for the kids and they’ve been running that thing now ever since…what is it 1968, probably.

ROBERT: 44 years.

RICHARD: Some of them graduated from school and go right into radio stations.

ROBERT: They do a great job. Then again, We were talking about this…the small town aspect of this is one of the first students in that program now works in the school district and is charge of the program. His son works for us in our call center. He’s a great young man to have for us. So it’s very much a small town atmosphere but also a very innovative program that overcame an obstacle where the local radio station and newspaper and movie theaters were afraid that a cable company, an unknown, was going to change their world to significantly to compete.

RICHARD: So it’s been fun. It really has. And if somebody told me I had to pick some kind of career, I’d pick what I did. It’s been fun.

BRIAN: Sounds good. I’ve got a very generic question here. It says what are some of the memorable moments in your cable career? Are there a couple that stand out to you? Obviously you’ve hit some highlights here but any others?

RICHARD: I’m thinking but I’m not thinking very well. (Laughter)

ROBERT: I have to say I always think that the most memorable thing in your career is probably the next thing. As I think about the stuff that I must have been tremendously excited about - it must have been memorable when we put in that first earth station and then put in the first simulstat station and when we were addressable and then we were digital and we launched cable modems and phones and now it’s IP Video. It goes on and on. I talked about some of the memorable moments were an overbuild battle in court with TCI. I still have reams of papers about that stuff. It was a huge thing, but there’s always…there’s so many exciting things coming toward us in the future. We’re just launching home security and broadbase home security. Those are some really memorable things we’re doing there. The push to be the first all-digital systems using DTA’s [digital television adapter], very memorable times and then you think but there is IPTV coming up. We’re starting to build the foundation for that in our system so there is always kind of looking at those things and saying “Well, those things are memorable but boy, what’s coming up is going to be even more memorable.” It’s going to be, I think, continue to be an exciting industry.

RICHARD: I’ll tell you something. It reminds me of when we were first getting started. My wife was the only one on the payroll other than me. I had an interview with a young gal, by the name of Betty Ann; it was in 1965 for a job. After we had a successful meeting, I said “You can start Monday.” She said “I have to be perfectly truthful with you - I’m only going to me here for the summer.” I said “Well, come on. Let’s see if we can get along anyway until I can find someone else.” She just retired after 42 years and gave me a card that said “It’s been a long, long summer.” (Laughter)

BRIAN: That’s wonderful. I guess related to what you were talking about looking to the future. We look the other way... did you ever thing that cable would evolve kind of the way it has. Did you ever think that you would be in the phone business or obviously the internet business or other…?

ROBERT: I think I heard that question, I think by definition that evolution is such a slow process that is almost imperceptible. So at what point, certainly not when I started in 1979, I thought that it was going to be a revolution to have a computer system, to have HBO, WTBS and WROR by satellite. That was revolutionary but as we evolved it seemed like we could always look a few years out and see the next generation of our technology. To think that in 1990, we were thinking fiber and digital but we weren’t thinking internet. By ’94 we were internet and maybe phone and now it’s something beyond that. So I can’t say that I’m that much of a visionary to say that 10 years before we were in the phone business, I was thinking about the phone. It is constant marvel that there is so many smart people in this industry that keep thinking of new ways. We kept talking about we were going to exhaust our spectrum but we found a way around it. And now we’re going find a way past the huge demand right now for IP bandwidth for streaming video. We’ll find ways to work with Netflix and we’ll find ways to work with Over the Top and IP wireless and all the pads and pods and phone apps that our coming our way now. I think we’ll continue to evolve.

RICHARD: Another thing is, Massillon is a great football city. It’s one of the top ones in the United States. It’s where Brown got started etc. I think when we built that channel and put football on there with the kids doing it live, it certainly helped the applications. You just have to do things that people would like. And that’s what we do.

BRIAN: Here’s a really large question but what would you say cable’s legacy is? How has cable impacted the world?

RICHARD: That is a big one.

ROBERT: I’ll split that one in half and I’ll say our world versus the world. In terms of our world, I think that legacy of our company is as he said 150 families with good jobs and well educated children who are going to move forward in the world in a community that has I guess has been the beneficiary of philanthropy and a concern from a local company continuing to be in business. That’s a very important legacy in our little corner of the world. And I’m grateful virtually everyday that we stopped entertaining brokers and stopped entertaining offers some years ago and said we’re a family business and we’re going to be a family business for a long, long time and we make our corner of the world a better place. So that’s our legacy and I think that’s important.

In terms of the world, wow, the cable industry has left such a rich legacy already of the colorful characters who are enshrined here, the advance of technology, certainly the impact we’ve had on worldwide communications with fiber and coax design and internet and voice over IP phone, and so on. We built the satellite industry and think of the networks. Things like CNN and ESPN, that I’m not sure that they would agree but they did it with us not in spite of us. They didn’t do it for us, we did it together. Very often I think they somehow did it without our assistance but there’s that whole legacy of the change of television. If you think of how those networks changed and we’re going to continue that battle of retransmission consent and of course in the future. But the legacy of cable is, we’re not TV. I always joke with people that it’s just TV. It’s not even worthy of a word. It’s just two letters. And you think how has it been characterized in the past? Well, it’s the boob tube, the idiot box, the vast wasteland. That was, that’s the history of cable television, but the critics of it…if you look at how television or cable television has advanced that model to really good programming and worldwide communications and continuing to participate in that throughout the decades is tremendous?

RICHARD: I have nothing more to add.

BRIAN: And the last question here is very open. Are there any last thoughts or comments on your career or on the industry that you would like to record, I guess.

RICHARD: Are you asking me that question?

BRIAN: Both of you.

RICHARD: Read it again.

BRIAN: Any last thoughts or comments on your career or on the cable industry?

RICHARD: Well, I’m 83 years old. It’s been a great life. And I think we’ve made a lot of people happy including the stock holders. That’s all.

ROBERT: As far as my career is concerned, my first thought is I hope that it is not over. I still hope I have quite a few years to go and continue to be engaged in dynamic industry. I also hope that my career can progress to a third generation in the family business which I think would be a terrific thing. Along with our attorney, I host a thing called a “Generations Dinner” every year at NCTA and we continue to get some of the people who are out here. Some of the people like Tom Gleason, the Bradley family, Dave Van Valkenburg. These guys, they like to show up every year just to swap lies and renew old acquaintances but it’s great to see those generational families that continue. If there’s a legacy in the industry from companies like ours, I’d like to think that’s part of it. It’s innovation, it’s sort of an excitement in the industry that in our larger corporate brethren doesn’t exist so much anymore. They have to be careful of any word they say and every step they take. I don’t want to characterize myself as a cowboy like what Bill Daniels or a Bill Bresnan were in those early years because they were far more adventurous than I was but we continue that effort that says let’s push the envelope, let’s challenge some people, let’s try that and if it doesn’t work, let’s try something else. If you are afraid to fail, then you’ve probably never going to try. So we keep trying. We have some scars to prove it but we also have some good memories and some smiles to go along with it.

BRIAN: Very good. Anything else come to mind?

ROBERT: I think would say two things. First, my father started this and said we could not have done this without terrific employees and we’ve had a great bunch of them and we’ve had them now. So we’re very grateful to their efforts over the years. I’ll just mention that we recently lost one of our super long term employees and that was Neil Travis. After 37 years with us, retired and then passed away. So we keep him in our thoughts.

RICHARD: A number of employees are over 35 or 40 years with us.

BRIAN: That’s testimony to the fact that they liked the [company].

ROBERT: Their toiled diligently in the field and they are very much appreciated.

RICHARD: And every day somebody in town comes up to me and says you’re man was out to our house when I called and he was just great. You know and he wouldn’t leave until he had corrected everything. Regardless of whose fault it was and it’s great to have people say that to you.

BRIAN: That’s the ideal. We don’t often get an ideal situation like that.